Loan advice

gcaster · 6 May 2014 at 19:38

After a bit of advice on a small personal loan.

I am looking at buying a new motorbike on finance and paying this off over 3 years. The rates that dealers are offering on used bikes are astronomical so I thought to look for a personal loan.
While I'm at it I'm looking to borrow a little extra to cover my graduate loan which I am getting screwed for by my bank (don't they just love the vulnerable).

Is it best to apply for a loan stating I am borrowing for a new vehicle or that it's for debt consolidation? I would assume the former is preferential but I will be paying off similar amounts for both reasons.

Few points that may help:

I have a good credit rating.
I am not currently struggling with any existing repayments, just looking to pay less interest!
I can easily afford the loan I am applying for.

Thanks

OpenToSuggestions · 6 May 2014 at 19:42

If they ask just tell them the truth.

There is nothing daft about taking a loan to pay a loan, when the only reason you're doing so is to save interest.

Tuppy_Glossop · 6 May 2014 at 19:42

Time to check other banks' rates. If you walk in to a different bank and say that you are not happy with your current bank because of the costs of your debt you might get a better offer. You can then go back to your current bank and give them the chance to beat the most competitive you have found.

ocmanus · 6 May 2014 at 19:45

You could try P2P lending services - someones mentioned Zopa to me on here before (for the other side of the coin). Perhaps these could offer you better rates? I can't imagine that stating either would affect the outcome as I thought it's all about your credit rating.

Kris_90 · 6 May 2014 at 19:48

I don't think it matters what option you choose, I've never had the bank pop round to check what I've purchased with loan proceeds

[TW]Fox · 6 May 2014 at 19:53

ocmanus said:
You could try P2P lending services - someones mentioned Zopa to me on here before (for the other side of the coin). Perhaps these could offer you better rates?

Personal loan rates from leading lenders are at all time lows so I doubt it. Hitachi and Santander will loan at 4.4 and 4.5% respectively.

gcaster · 6 May 2014 at 19:53

Thanks, I saw Zopa come up on a comparison site but think I'd prefer to go with a larger, more reputable brand.
My current graduate loan is at 11.9% APR and shopping around the best option for me seems to be Sainsbury's at 5.6%.

EDIT:

[TW]Fox;26266488 said:
Personal loan rates from leading lenders are at all time lows so I doubt it. Hitachi and Santander will loan at 4.4 and 4.5% respectively.

Exactly this, although unfortunately I'm not borrowing enough for rates quite that low.

kitkat9933 · 6 May 2014 at 19:56

I got a mate called Dodgy Dave who can lend you some wonga.

ocmanus · 6 May 2014 at 20:00

I can understand your reluctance, but they are fully regulated. Hope it all works out for you!

gcaster · 6 May 2014 at 20:05

kitkat9933 said:
I got a mate called Dodgy Dave who can lend you some wonga.

Trust me his number please, he sounds lovely.

kitkat9933 · 6 May 2014 at 20:11

gcaster said:
Trust me his number please, he sounds lovely.

Sent.

Please note if you don't keep up with your loan repayments you will be kidnapped and tortured until you pay.

Maximum Triceratops · 6 May 2014 at 20:17

Save and buy it outright, I know this is not always possible but if you can it makes the purchase miles more satisfying.

anything I don't mind · 6 May 2014 at 20:55

Just tell the bank you want to buy a motorbike because you need it for work. This will convince them to give you a loan i think.

Kill_Phil · 6 May 2014 at 21:55

Just say it's for a vehicle, don't over complicate things. And be warned with my first loan after graduating whilst they advertised low rates of 5.6% they whacked up the rates for me to 12.9% due to having no loan history

scorchisio · 6 May 2014 at 22:03

I work in finance and assure you the acceptance rates of all the low rate lenders Like sainsburys Tesco santander etc are a tiny percentage. They only lend to people who have never missed a payment in years and have tons of disposable income and who own their own home and have lived there well over 4 years. Everyone else gets declined. Dont make too many applications each one leaves a footprint on your credit profile lowers the score and makes you look higher risk.

Destination · 6 May 2014 at 22:07

Have you a santander 1 2 3 account?
Consider one, with quidco, same for their credit card, applied online, with quidco, then the loan for the bike and consolidation.
Ensure early repayment charges do not apply to your first loan, ensure if they do it doesnt screw you more than the dodgy apr.

BDEE · 6 May 2014 at 22:08

scorchisio said:
I work in finance and assure you the acceptance rates of all the low rate lenders Like sainsburys Tesco santander etc are a tiny percentage. They only lend to people who have never missed a payment in years and have tons of disposable income and who own their own home and have lived there well over 4 years. Everyone else gets declined. Dont make too many applications each one leaves a footprint on your credit profile lowers the score and makes you look higher risk.

For someone who "works in finance" you give out a lot of mis-information.

scorchisio · 6 May 2014 at 22:15

I submit about 20 clean deals a day to these companies and the ones I mentioned are the only ones who ever get accepted. Been doing it years.

Slobbo · 6 May 2014 at 22:18

scorchisio said:
I work in finance and assure you the acceptance rates of all the low rate lenders Like sainsburys Tesco santander etc are a tiny percentage.

Your company is obviously not aware of the European Consumer Credit Directive 2008.

BDEE · 6 May 2014 at 22:20

So you will be aware that the advertised typical APR has to be one which the lender expects to be able to offer to a minimum of 51% of applicants then?

Hardly a "tiny" percentage.